National Cheng-Chi University
College of Business
Financial Management
Autumn 2014
Course Information
Course Number: 000347-00-1 (FIN 347)
Time: Thurs: 14:10 – 17:00 p.m.
Room: Information Science 5th Fl. 140105
Prereq: Principles of Accounting
Instructor Information
Instructor: Yee-Tien Fu
Office: Commerce 12th Fl. #261249
Office Hrs: By Appt.
Phone: 2939-3091 Ext 81249
E-mail: iamtedfu@gmail.com
I. Introduction
This course entails a study of the financial operations of a business firm. The goal of the firm and its
financial managers is to maximize shareholder value through a combination of investing, financing, and
working capital decisions. Major topics include: (a) the financial environment of the firm, (b) the time
value of money, (c) bond and stock valuation, (d) capital budgeting, (e) risk and return, (f) capital
structure theory, and (g) working capital management. FIN 347 provides a balanced coverage of the
quantitative and qualitative aspects of financial management; hence, it should benefit students in all
business disciplines.
II. Goals
Through a combination of readings, lectures, class discussions, and problem assignments, students
should: (a) gain an awareness of the investing and financing alternatives available to the firm, (b)
develop a knowledge of cash flow valuation and analysis techniques, (c) achieve an understanding of the
role of the financial manager in making decisions that maximize the value of the firm, and (d) appreciate
the importance of the risk-return tradeoff, portfolio theory, and efficient capital markets in financial
decision making.
III. Course Materials
Required:
1. Corporate Finance. Berk and Demarzo. Prentice-Hall, 2014. (We intend to cover the full spirits
of the whole book within the allotted time in a semester.)
2. A financial calculator
3. Additional readings, as assigned by the instructor
Recommended:
1. Subscription (or online access) to current financial publications such as Fortune, Forbes,
Business Week, Barron’s, Wall Street Journal, or Financial Times.
IV. Examinations
There will be 2 midterm examinations and two quizzes.
Exam 1 and Quiz 1 will cover Chapters 6, 7, 8, 9.
Exam 2 and Quiz 2 will cover Chapters 10, 11, 12, 13.
V. Examination Policies
1
Examination Times: Each student is responsible for attending the examinations at the time scheduled in
the syllabus. Taking an examination at an alternate time is not possible except under extreme
circumstances (as determined by the instructor). If you have a potential conflict with a scheduled exam,
please contact me as soon as possible, and no later than two weeks prior to the exam. Written
documentation of any conflict must be submitted to me, and include your name and NCCU Student ID
Number. Students who miss an examination without prior authorization will receive a grade of zero for
the exam.
Examination Materials: Each student should bring No. 2 pencils, a financial calculator, and a picture
ID to the exam session. All other examination materials (e.g., a test booklet, formula sheet, and scratch
paper) will be provided. Test booklets, formula sheets, and used scratch paper must be returned upon
completion of the exam. The use of any other materials or technologies during the exam session is
strictly prohibited. Personal items should be stored beneath your desk for the duration of the exam.
Picture IDs may be checked during the exam session. Any violation of these policies will result in a
reduction in your exam grade.
Calculators: Many exam questions require the use of a financial calculator. Calculators cannot be
shared during the exam, so please ensure that your calculator is fully functional before entering the exam
session. All calculators are subject to inspection, and restrictions on certain types are imposed (e.g.,
programmable calculators must be “de-programmed” during the exam session). Further information
regarding calculators is provided in the “Additional Policies” section of this syllabus.
Post-Examination Review: Individual examinations will not be returned, however, I will conduct a
brief post-examination review during class. Students who wish to review their exams individually are
encouraged to do so during my office hours. Specific questions regarding an exam must be addressed
in the two-week period following the posting of examination grades. After this time, the examinations
will be stored and unavailable for retrieval. Exam grades are final, except in the instance of a recording
error. If you feel that your posted exam grade is incorrect, please contact me immediately.
Exam Format: Exams may include a combination of question types (e.g., problem, multiple choice, and
short answer/essay). The exam questions will reflect a balance of quantitative and qualitative content,
consistent with our coverage of the course material.
VI. Academic Integrity
Academic integrity and honesty are critical to the conduct of this course. Instances of scholastic
dishonesty (copying, cheating, using unauthorized materials or technologies, etc.) will be disciplined to
the maximum extent allowed by University policy. The responsibilities of both students and faculty with
regard to scholastic dishonesty are described in detail in the Policy Statement on Scholastic Dishonesty
for the College of Commerce:
By teaching this course, I have agreed to observe all of the faculty responsibilities described in that
document. By enrolling in this class, you have agreed to observe all of the student responsibilities
described in that document. If the application of that Policy Statement to this class and its assignments
is unclear in any way, it is your responsibility to ask me for clarification.
Policy on Scholastic Dishonesty: Students who violate University rules on scholastic dishonesty are
subject to disciplinary penalties, including the possibility of failure in the course and/or dismissal from
the University. Since dishonesty harms the individual, all students, and the integrity of the University,
policies on scholastic dishonesty will be strictly enforced. Refer to the Student Judicial Services website
2
or the General Information Catalog to access the official University policies and procedures on
scholastic dishonesty as well as further elaboration on what constitutes scholastic dishonesty.
VII. Grade Computation
Exam 1
30%
Exam 2
30%
Quiz 1
15%
Quiz 2
15%
Homework Sets
10%
Final letter grades will be awarded according to the following criteria:
90-100 = A; 80-89 = B, 70-79 = C, 60-69 = D, below 60 = F
You will receive a numeric score for each exam. Letter grades will not be determined until the scores for
all exams are averaged, as indicated above. Final course grades may reflect the application of a small
curve. If curving is required, the target GPA for the course is approximately 2.8. All letter grades are
final except in the instance of a recording error.
The requirements and recommendations for succeeding in this course are outlined in this document.
Since no make-up or extra-credit work is available, I encourage you to follow these suggestions and
utilize office hours to maximize your understanding of the course content before the exam dates.
VIII. Additional Policies
A. Attendance – You are expected to attend every class meeting. I understand that circumstances may
arise that require your absence; however, these should be the exception rather than the rule. Regular
attendance and class participation are essential to your understanding of the course content. Some
material may be presented only during class meetings; hence, merely reading the text will not ensure
sufficient exam preparation. If you must miss a class for any reason, please consult a fellow student to
attain the notes and announcements for the class.
B. Tardiness/Leaving Early – Please show respect for your classmates and the instructor by arriving on
time and remaining for the duration of the class session. If you must arrive late or leave early, please do
so quietly and courteously to avoid disrupting the class. Chronic tardiness or leaving early will result
in a reduction in your course grade.
C. Calculators – A basic financial calculator is required for this course. A relatively inexpensive
calculator ($30-$40) with exponent, root, present value, future value, IRR, and NPV functions will
suffice for this and other finance courses. Popular models that meet these criteria include the HP 10B
and TI BA II Plus. The HP 10bII is my personal favorite, and the only one for which I can provide
“technical” support. Before choosing a calculator, please note that more expensive, programmable
calculators are unnecessary and must be “de-programmed” during exam sessions.
Learning to use your calculator is a necessary, but insufficient ingredient for success in this course.
Despite its importance, the calculator is merely a tool that facilitates the problem solving process, so do
not over rely on its capabilities. I urge you to become well acquainted with your calculator long before
the first exam.
3
D. Homework – I will assign recommended problems for most of the chapters of the text. These
problems will not be collected or graded; however, they constitute an essential element in exam
preparation. I strongly recommend that you attempt to solve the problems before consulting the
solutions manual (posted on Blackboard). As you work these problems, try to understand the concepts
and relate them to the material covered during class and in the text. Please consult me during office
hours if you encounter difficulties.
E. Access to Course Website: TBA.
F. Laptop Computer Policy – In the interest of avoiding the distractions of a “wireless world,”
students’ use of laptop computers is strictly prohibited.
G. Other – All other matters of class management and conduct will be handled in accordance with
published University guidelines. Please consult the General Information Catalogue or the Dean of
Students’ web site for additional information.
IX. Additional Comments
The aforementioned policies provide the basic guidelines and code of conduct for the course. They are
designed to reduce confusion and establish an equitable framework for the entire class. As a matter of
principle, I will enforce these policies fairly and religiously.
The “spirit” of the course is just as important as the “rules and regulations.” My goal is to create a
cooperative classroom environment in which we learn from each other. To that end, I welcome your
constructive comments and suggestions as we progress through the course. Your feedback is an
important element of course delivery and development.
Barring an emergency, or except as previously arranged, I will be available during my office
hours. I encourage you to visit with me regarding any concerns with the course or just to say
“hello.” I am also accessible via telephone or E-mail. I will make every effort to return your call or
respond to your E-mail within one business day of its receipt.
General Study Guidelines
The following recommendations are presented as an addendum to the syllabus.
Class Preparation:
It is important that you read the assigned chapters before we discuss them in class. Class lectures and
discussions are much more meaningful if everyone is conversant with the subject matter. I will discuss
the major concepts from each chapter and emphasize what is most important, but I will be unable to
cover everything during class.
As you read the chapters, ask yourself the following questions:
 What is the purpose of this concept or formula?
 Why is this concept important?
 How did the author or instructor demonstrate its application?
 How does it relate to other concepts/formulae that we have studied?
 Can I describe this concept or formula in my own words?
 Can I answer the concept questions in the text?
4
Problem sets - I suggest that you work the recommended problems in conjunction with your
reading/review of each chapter. Practice makes perfect, so work as many extra problems as necessary to
master the concepts. Initially, try to work each problem without consulting the solution set. Do not wait
until the week before the exam to attempt the problems.
Be prepared for class - Bring your text, calculator, and pertinent notes to each class session. Much of
our class time will be devoted to discussing/reviewing example problems. Consult the tentative course
schedule for weekly reading and problem set assignments.
Take good class notes - Class notes for each chapter may be posted on Blackboard, but these will be
“skeletal” by design. Class lectures and discussions will enhance these notes and integrate them with
other essential course material.
Ask questions - I encourage you to be an active learner by asking questions and participating during
class discussions. Please E-mail me or see me during office hours if you have additional questions
regarding the course material.
Keep apprised of current financial issues - As time permits, we will discuss how the concepts in our
text apply to the “real” world. Devote a little time each day to perusing the Web and/or financial
publications for pertinent topical issues.
Exam Preparation:
The course material and the exams are cumulative by nature. The basic concepts that we cover early in
the course provide the foundation for more advanced material that we address later. Try to master the
concepts as we cover the material and avoid “cramming” the week before the exam. It is extremely
difficult to catch up if you get behind on the readings and problem sets. I will schedule review sessions
prior to each examination, however, you should review the course material “early and often” on your
own and/or in your study group.
5
FIN 347 – Tentative Course Schedule – Autumn 2014
Wk Day
1
T
Date
Class Coverage
Introduction
Chapter Content
Overview of Course
2
T
T
Chapter 1
Chapter 2
Introduction to Corporate Finance
Financial Statements and Cash Flow
3
T
T
Chapters 2 and 3
Chapter 4
Financial Statement Analysis and Planning
Discounted Cash Flows (Time value of Money)
4
T
T
Chapter 4
Wrap-up and Review
Discounted Cash Flows (Time value of Money)
5
T
T
Review
Chapter 5
Chapters 1 – 4
Interest Rates and Bond Valuation
6
T
T
Chapter 6
Chapter 7
Stock Valuation
Capital Budgeting and Investment Rules
7
T
T
Chapters 7 and 8
Chapter 8
Capital Budgeting and Investment Rules
Capital Budgeting Decisions
8
T
T
Wrap-up and Review
Exam 1
9
T
T
Guest Speaker
Guest Speaker
TBA
TBA
10
T
T
Chapter 9
Chapter 10
Real Options and Risk Analysis
Risk and Return
11
T
T
Chapter 11
Chapter 11
CAPM and Modern Portfolio Theory
CAPM and Modern Portfolio Theory
12
T
T
Chapter 12
Wrap-up and Review
Risk, Cost of Capital, and Capital Budgeting
13
T
T
Exam 2
Chapter 13
Efficient Capital Markets
14
T
T
Chapter 14
Chapter 15
Capital Structure: Basic Concepts
Capital Structure: Advanced Concepts
15
T
T
Chapters 15 and 16
Chapter 16
Capital Structure and Dividend Policy
Dividend Policy
16
T
T
Chapter 18
Wrap-up and Review
Short-term Financial Planning
T
Final Review and Quiz
Comprehensive (emphasis on Ch. 13 - 16, & 18)
6
FIN 347 – Tentative Course Schedule – Autumn 2014
Ref: Dr. Bill Way’s course syllabus of Business Finance at University of Texas Austin.
7